Short questions (Answer all 4questions, give diagrams where appropriate)
11. Consider the market for two goods that are substitutes, such as pens and pencils. If a technological breakthrough reduced the cost of producing pens:
a What would happen to the supply of pens?
b What would happen to the price of pens and the quantity exchanged?
c What effect would this change in the price of pens have on the market for pencils?
12. Which of the following goods would you expect to have the most inelastic demand? Why?
a Swiss cheese
c Dairy products
13. Why does the government grant patents to investors? Why does the government give monopoly power to utility companies?
14. Three years ago the chief executive officer (CEO) of a large firm instituted a plan that encourages division managers to share information obtained about the demographic characteristics of those who purchase the firm’s final product. Since the plan was implemented, however, the CEO has noticed that less information is available than ever. Why do you think the CEO’s plan backfired?
- ?Lv 51 0 年前最佳解答
11. a. The supply of pens will increase.
11. b. The price of pens will decrease and the quantity will be increased.
11. c. Since both of them are considered substitutes, demand for pencils will decrease.
12. 答案是C, because no matter how the price increase, there is always a demand for dairy products. Inelastic demand means change in demand for the products will not be affected by the change in price.
13. Investors will be granted for the patents because they already invest/spend a lot of money on researching/developing the products/services. As a result, they should be protected by law.
Monopoly power is given to utility companies is because the cost for set up is huge & difficult. Also, the market demand doesn't allow competitions, if there are, it will be too confusing for consumers.
14. The reason for the failure might be competition. The division managers are afraid to share their customer information with the others. They are afraid that the other division will decrease the price and the customers will go to the other division for the products.參考資料： graduate student from University of Toronto, major in Economics & Psychology
- 1 0 年前
I only know the answer of question 12.
12. a > b > c : Diary products can be any things made of milk. Cheese is one of the diary products. Swiss cheese is one type of Cheese. Therefore, swiss cheese have the most inelastic demand. That is, many people like diary products, some of them like cheese but only few like Swiss cheese.
I hope you get what I mean & this can help.參考資料： 自己